High shipping costs are probably to blame, increase goes into effect April 17.

Amazon began sending e-mails to subscribers of its Prime shipping and streaming service this morning announcing that the cost of the service would be going from $79 to $99 a year. The new rate will apply to current Prime subscribers if their renewals come up on or after April 17, 2014. Subscribers whose contracts renew before that date will still get the $79-per-year price, and as of this writing, adding a brand-new one-year Prime subscription to your cart still costs only $79. This is the first time Amazon has ever raised the price of the service.

Amazon first announced that it was considering a price hike back in January when it reported its fourth-quarter earnings, which missed analyst expectations. Amazon isn't known for its huge profits, but CFO Tom Szkutak said that the cost of offering free two-day shipping to Prime customers had become unfeasible for the company. Amazon was considering raising the price by as much as $40, but it eventually settled on a less-steep $20.

Depending on how you use Prime, it may still be a good deal relative to other streaming subscriptions. A standard Netflix or Hulu Plus streaming subscription costs $7.99 a month, or $95.88 a year; a Spotify Premium or Rdio subscription costs $9.99 a month, or $119.88 per year. If you make extensive use of Amazon's free two-day shipping, its book lending library for Kindle owners, and its collection of streaming videos, the price is still competitive. If you only want to use one of those services, though, the price increase may be harder to swallow.

Andrew Cunningham
Andrew has a B.A. in Classics from Kenyon College and has over five years of experience in IT. His work has appeared on Charge Shot!!! and AnandTech, and he records a weekly book podcast called Overdue. Twitter@AndrewWrites

152 Reader Comments

It's still worth it at $100--excuse me--$99 per year for as much as I use it. Though I am glad my renewal period was at the end of January. Gives me nearly a year until I have to reup at the higher rate.

I'd actually prefer a tier with just the free second-day/cheap next-day shipping option and skip the Kindle & video options—I order at least 1-2 physical items from Amazon per week, but I only use the video streaming as an emergency "I'm bored and stuck in an airport" entertainment option. If there were a way to knock $10 off the price and just have the shipping, I'd be all over that.

But, on the other hand, even at $99 I think it's still a pretty good deal.

I'd actually prefer a tier with just the free second-day/cheap next-day shipping option and skip the Kindle & video options—I order at least 1-2 physical items from Amazon per week, but I only use the video streaming as an emergency "I'm bored and stuck in an airport" entertainment option. If there were a way to knock $10 off the price and just have the shipping, I'd be all over that.

But, on the other hand, even at $99 I think it's still a pretty good deal.

This.

For me the videos are a meh addition. I have Netflix if I want to marathon a show. Netflix has it's own problems with the most up to date seasons and licensing agreements, but I find it better than Amazon, which many times has a season or two for free, but then has additional charges to watch more content or rent particular movies. I can't help but feel like I'm being double dipped on their video service.

This probably isn't exactly true, I can understand having to pay extra for the newest content. I just feel like their streaming service should be included at the price point, or excluded and lowered. Not a half-and-half solution that leaves me with some, but not nearly all, content.

That's not a dramatic increase, though I do wish they'd release an Android phone/tablet video player. Odd, since they have one for Google TV (and not Apple TV, even stranger).

I also still think they should add incentives for not using 2-Day shipping. Some of the time I care, sometimes I don't. Maybe they should consider something like every x number of times you use standard instead of 2-day you get a free overnight - the expectation being x * 2-day costs more than 1 overnight for Amazon.

Yeah $99 is still pretty easy to swallow given how often I use it, though I've noticed them cutting some annoying corners lately (handing packages off from UPS to USPS, etc.). I'd have probably taken a $40 price increase, too, but they probably decided that raising it to three figures would have been too off-putting psychologically.

$99 is basically keeping pace with inflation (adjusted for inflation $79 in 2005 money is about $95 today. Meanwhile the service has added so many additional benefits along the way that the value received for those dollars has increased dramatically.

There are lots of things worth complaining about when companies raise prices. A company doing so after a long time and adding value throughout isn't a time when that applies.

I'd actually prefer a tier with just the free second-day/cheap next-day shipping option and skip the Kindle & video options—I order at least 1-2 physical items from Amazon per week, but I only use the video streaming as an emergency "I'm bored and stuck in an airport" entertainment option. If there were a way to knock $10 off the price and just have the shipping, I'd be all over that.

But, on the other hand, even at $99 I think it's still a pretty good deal.

Intelligently Netflix did this when they separated their DVD shipping plan, and even more recently with the differently priced streaming options.

I do hope Amazon realizes this and stops subscribing to the "one size fits all" mentality.

Or maybe UPS should just charge us a flat fee for shipments? I'd much prefer ALL of my shipments to be 2 day, not just Amazon.

I'd also be interested in a service that doesn't have the VOD and Kindle stuff. I can count on one hand how many times I've streamed anything from Amazon VOD in the past year. I mostly blame my slow internet connection for that, but the local ISP doesn't seem to be in a hurry to offer anything faster than 3Mpbs service. Another thing I really want to see Amazon get rid of the Add-on items if they're raising the price of Prime. Still, it's not an awful deal at $99, if it had gone up more than $20, there may have been a need to reconsider my Prime membership. As it stands, this isn't too bad.

Sorry for the off topic, but as I scroll down I notice that even relative, informed comments are all being downvoted; currently every post has exactly 1 downvote. I noticed this the other day on the metadata article too, with a bit more variance after real people starting hitting certain comments. Just curious if I missed something, but it seems like someone has scripted a tool to downvote every comment on Ars, Anyone else noticed this?

I'd actually prefer a tier with just the free second-day/cheap next-day shipping option and skip the Kindle & video options—I order at least 1-2 physical items from Amazon per week, but I only use the video streaming as an emergency "I'm bored and stuck in an airport" entertainment option. If there were a way to knock $10 off the price and just have the shipping, I'd be all over that.

But, on the other hand, even at $99 I think it's still a pretty good deal.

Intelligently Netflix did this when they separated their DVD shipping plan, and even more recently with the differently priced streaming options.

I do hope Amazon realizes this and stops subscribing to the "one size fits all" mentality.

I'd actually prefer a tier with just the free second-day/cheap next-day shipping option and skip the Kindle & video options—I order at least 1-2 physical items from Amazon per week, but I only use the video streaming as an emergency "I'm bored and stuck in an airport" entertainment option. If there were a way to knock $10 off the price and just have the shipping, I'd be all over that.

But, on the other hand, even at $99 I think it's still a pretty good deal.

Agreed. I use the two day shipping constantly. I've been a Prime member for two years, and I have never used the video streaming or Kindle features. I'm not a big TV or movie viewer, and prefer buying hard copies of my books...so in my mind, those extra features don't offset anything. I'd happily keep paying $79 per year, and nix all of the extras.

I really think I would find the video service offered with Prime better if they would do a better job at curating the videos that are included, separating them out better from all of their other offerings.

They really just need a Netflix-like dedicated site. A walled garden that displays everything as nicely as Netflix does. Perhaps then I might be able to find value in the service. Currently, I very nearly never use it.

Also, I'd really appreciate it if they'd pick up that new Chris Carter series. The pilot was pretty good!

I'm set to renew on April 16th, 2014. When I look at my account, it says it will auto renew for $99. Hopefully that's just a bug. I haven't gotten an email yet. I really only use the 2 day shipping and that's mainly around Christmas, so at $99 I going to have to reevaluate renewing.

I'm set to renew on April 16th, 2014. When I look at my account, it says it will auto renew for $99. Hopefully that's just a bug. I haven't gotten an email yet. I really only use the 2 day shipping and that's mainly around Christmas, so at $99 I going to have to reevaluate renewing.

John

Concur. I'd decided to re-up in April for $79. At $20 more, I'll have to look at my orders over the last year and reevaluate.

I really think I would find the video service offered with Prime better if they would do a better job at curating the videos that are included, separating them out better from all of their other offerings.

They really just need a Netflix-like dedicated site. A walled garden that displays everything as nicely as Netflix does. Perhaps then I might be able to find value in the service. Currently, I very nearly never use it.

Also, I'd really appreciate it if they'd pick up that new Chris Carter series. The pilot was pretty good!

I don't use Netflix or Hulu or any other streaming video services, just Amazon, so I'm definitely getting my money's worth. It's easy to browse the free Prime video options on Amazon's web site, not sure what IronTek is complaining about.

According to the email, my prime sub doesn't have to renew at the higher price until December 2015., though the Prime membership page says Dec 2014 for $99.

Yeah $99 is still pretty easy to swallow given how often I use it, though I've noticed them cutting some annoying corners lately (handing packages off from UPS to USPS, etc.). I'd have probably taken a $40 price increase, too, but they probably decided that raising it to three figures would have been too off-putting psychologically.

I don't mind the handoff to USPS. I live in an apartment complex with centralized mailboxes. UPS/Fed Ex will leave my package at the leasing office if I'm not home. USPS will leave mine in my mailbox or in a parcel locker (with a key to the locker in my mailbox).

So long as it takes the same amount of time, USPS ends up being more convenient.

Sorry for the off topic, but as I scroll down I notice that even relative, informed comments are all being downvoted; currently every post has exactly 1 downvote. I noticed this the other day on the metadata article too, with a bit more variance after real people starting hitting certain comments. Just curious if I missed something, but it seems like someone has scripted a tool to downvote every comment on Ars, Anyone else noticed this?

I noticed this very same thing. There is someone or something always down voting everything even if it's not "negative".

As for prime going up, I have noticed that their two day is no longer actually two days. I have never bothered to call Amazon over this issue. Maybe I should. Amazon is actually raising their price a few bucks higher than NF. I think that will turn people off come re-up time. I can sometimes find shows or movies that Amazon carries but not NF. My sub is up in July and I will decide then if 20 bucks more is worth it or not. Maybe it is and maybe it isn't. Now I suppose NF will be shooting up their cost to subs after this move by Amazon.

Are they going to do something about the miserable Prime experience in Canada? Or are they just going to increase the price? (and for other non-US countries, does Amazon and/or Prime suck for you, too?)

It's not worth it here: no streaming, no eBook library, vastly smaller selection, slower shipping and higher prices. It's also the reason why Kobo is just stomping Kindle in sales.

I'll happily accept the price increase if they just stop using that garbage Prestige shipping company. Prime's unlimited 2-day shipping becomes much less attractive when "2-day" shipping is "3-day. Or 4. Maybe. Or a week. Whatever."

Anecdotally, I think Amazon now has enough market share and customer lock-in across product and service lines to raise prices, even though it's a reasonable bump. As others have mentioned, the corner-cutting with shipping speed is irritating. I've noticed over the last number of months that a number of products that I buy routinely are no longer a bargain on Amazon.

Amazon is becoming a mature business, and after years of taking a loss to acquire loyal customers, it's time to cash in. Totally makes sense to me, though I'll probably do a little more shopping around now.

I'm going to cancel my prime when it expires. To me, Prime has gotten worse over the years, not better: Prime members used to get 2-day shipping on subscribe+save items, and we didn't have this "add-on" bull.

I've watched literally 2 movies in 6 years, due to their terrible search interface, and the Kindle Lending Library gets you self-published junk.

I'll happily accept the price increase if they just stop using that garbage Prestige shipping company. Prime's unlimited 2-day shipping becomes much less attractive when "2-day" shipping is "3-day. Or 4. Maybe. Or a week. Whatever."

Likewise with Prime in the UK. Sometimes, my parcels would come by DPD or UPS and be on time. Other times, they'd come by HDNL/Yodel and be late or not turn up at all. They and City Link also have a habit of lying about "no-one home to deliver to".

These problems caused me to cancel mine. Not worth the money for an unreliable service.

I'll happily accept the price increase if they just stop using that garbage Prestige shipping company. Prime's unlimited 2-day shipping becomes much less attractive when "2-day" shipping is "3-day. Or 4. Maybe. Or a week. Whatever."

Same here, but with a company called LaserShip. Apparently I wasn't home for a delivery two days ago, although at the time they claimed the delivery attempt I distinctly remember working in my garage with the garage door open, also one of my kids was in a front room doing homework where he could see the driveway for a couple hours around that time. Oh, and they just leave packages at my front door anyway, so my being home or not is irrelevant. I really need that package before the weekend, but will I get it? Who knows...

Amazon Prime made a lot more sense before they added millions of "add-on items" to the store, which are exempt from free shipping. That just infuriated me. If they get rid of those "add-on items", I'm fine with the price increase.

I'd actually prefer a tier with just the free second-day/cheap next-day shipping option and skip the Kindle & video options—I order at least 1-2 physical items from Amazon per week, but I only use the video streaming as an emergency "I'm bored and stuck in an airport" entertainment option. If there were a way to knock $10 off the price and just have the shipping, I'd be all over that.

But, on the other hand, even at $99 I think it's still a pretty good deal.

I'll happily accept the price increase if they just stop using that garbage Prestige shipping company. Prime's unlimited 2-day shipping becomes much less attractive when "2-day" shipping is "3-day. Or 4. Maybe. Or a week. Whatever."

I have found that every time they miss their shipping time, they'll give me a $10 credit if I point it out. Less desirable than an on time shipment, but they're at least not ignoring the fact that it happens.

The new rate will apply to current Prime subscribers if their renewals come up on or after April 17, 2014.

Looks like your mileage may vary on that one. My renewal date is in August, but my email about the increase says that the new rate won't apply until 2015.

Quote:

We are writing to provide you advance notice that the price of your Prime membership will be increasing in 2015. Your 2014 annual renewal will remain at the original price of $79. On August XX, 2015, your membership will renew at $99/year.